Economy Update 31 Oct-6 Nov - CII

Economy Update 31 Oct-6 Nov - CII

INDICATORSInflation Rate for the week ending22 Oct 2011Categories Weekly AnnualPrimary articles 0.2 12.1Fuel, power, light &lubricant-0.2 14.5• The annual inflation in primary articlesincreased to 12.1% for the week ended 22October 2011, from 11.8% in the previous week.• The annual inflation in food articles increasedto 12.2% for the week ended 22 October 2011from 11.4% in the previous week, while annualinflation in Non-Food articles declined to 6.4%from 7.7% in the previous week.• The Index of Eight core industries having acombined weight of 37.9% in the Index ofIndustrial Production (IIP) showed a growth rateof 2.3% in September2011 compared to 3.3% inSeptember 2010.• India’s export in September 2011 recorded agrowth of 36.4%, standing at US$ 24.8 billion.Imports stood at US$ 34.6 billion, recording agrowth of 17.2%.• India’s Human Development Index rankingfalls by 15 ranks to 134.middle of the last month.Dear Reader,In the backdrop of rising international crude oilprices and depreciation of India rupee, thegovernment owned oil firms increased petrol pricesby Rs 1.82 per litre effective from November 5. Thisis the 13 th31 October-6 November2011hike in petrol prices since the fuel wasdecontrolled in June last year, and second since theThis move would be another blow to consumers who are already battlinghigh double digit food inflation. However, this increase in petrol prices isexpected to have somewhat limited in inflation because cascading effect ofpetrol is less as compared to diesel. Thus, expectations of RBI pausing theinterest rate hike in the forthcoming Monetary Policy Review remains intact.Chandrajit BanerjeeDirector General, CII• Foreign Exchange Reserves as on28 October 2011 stood at US$ 320.4 billion, upby US$ 2.0 billion from the previous week.• The call money rates as on 4 November 2011traded in the range of 5.0 - 8.6%.• At the Treasury bills auctions held during theweek, the YTM for 91–day T-Bills stood at 8.6%.IN THIS ISSUE MarketsIndustry News Policy Development Global News

2POLICY DEVELOPMENT• The Financial Services Secretary announced thatNet Absorption through LAF (Rs Crore)RBI is likely to come out with guidelines on0allowing new private banks by November end.-10000-2000031-Oct1-Nov2-Nov3-Nov4-Nov• The Indian Government has approved 140 billion-30000-40000rupees (US$ 2.85 billion) for the recapitalization-50000of state-run banks in the current fiscal year that-60000ends in March.• The Comptroller and Auditor general of India willExchange RateSeries2 Series1scrutinize the expenditure and outcome of thepublic works initiated under the Mahatma GandhiNational Rural Employment Guarantee Schemein the 12 states that receive the largest share ofUSD50494949494931-Oct1-Nov2-Nov3-Nov4-Nov69686867Eurothe fund.BANKING INDICATORSRs. CroreOutstanding as on% Variation overIndicators 212 October, August,2011 Fortnight YearTotal Bank Credit Food Credit Non Food Credit41,50,52068,92240,815980.08.9-0.119.346.019.0Aggregate Deposit 56,18,986 -0.1 15.2Broad Money (M3) 69,58,664 -0.1 12.0Credit Deposit Ratio 73.9Source: RBI- 2 -

3EQUITY MARKETS• Markets across the globe tumbled on account of theunexpected Greek proposal of a referendum on the EUbailout package. However, Papandreou instead optedfor political consensus and is ready to negotiate acoalition government if his socialist allies give him theconfidence vote.• On a positive note, ECB’s rate cut of 25 basis points toClosing Value asGlobal Stock In-Weekly Changeas on on 24 September2011November Weekly Change (%)Indices(%)NYSE: DJIA 11,493.6 11,983.2 1.9 -2.0FTSE 100 5,292.0 5,527.2 3.2 -3.1Nikkei 225Nikkei 2258,801.48,950.7-2.81.7Straits TimesStraits Times2,848.22,843.1-2.03.5KOSPIKOSPI1,928.41,867.8-0.15.0Source: Yahoo FinanceSource: Yahoo Finance1.25%, prevented stocks from tumbling furtherdownwards, as it indicated that the new ECB head willsupport growth in the face of inflation.• Indian stock markets continued to be volatile onaccount of the establishments in Greece.• Total turnover during the week on BSE stood atIndian EquityIndicesBSE SENSEXBSE 500S&P CNX NIFTYS&P CNX 500Source: NSE, BSEClosing Value onClosing Value on 4Week's %%2 SeptemberNovember 2011Change201116,821.5 17,481.96.1-1.86,538.1 6,706.1 5.6 -1.15,040.0 5,265.86.2-1.84,070.9 4,179.75.7-1.2Rs 11,365 crore and on NSE at Rs 53,774 crore.Net Institutional ActivityEquityDebtWeekly FII (US $ Million) 644.0 3.1COMMODITY MARKETSYear -to-date FII(US$ million)Weekly Mutual Funds#(Rs Crore)558.3 -2,933.0-441.4 1,227.4Source:SEBI #as on 3 Nov, 2011• NYMEX West Texas Intermediate Crude Oil forNovember delivery stood at US$ 94.1 per barrel on 3November 2011, up by US$ 3.9 per barrel from theprevious week.• New York spot price for Gold was US$ 1,755.8 perounce as on 4 November 2011, up by US$ 14.8 perounce from the previous week.Closing Value as Week'sCommodity Spot Indi-Closing Value as on Week's %on 2 September%Indices5 November 2011 Change2011ChangeMCX AGRI 3099.93 3,247.5 1.71.0MCX METAL 5036.24 4,752.7 2.32.2MCX ENERGY 2796.07 3,205.2 1.8 1.8MCX COMDEX 3593.36 3,669.7 2.1.8Source: MCX, NCDEX3

4INDUSTRY NEWSBSE IndicesClosing Valueon 4 November2011 Week's % ChangeAUTO INDEX 9,212.4 -3.7BANKEX 11,232.6 -1.2BSE CAPITALGOODS 10,889.9 -1.3BSE CONSUMER 6,510.6 -1.9BSE FMCG 4,173.1 0.5BSE HEALTHCARE 6,137.5 -0.5BSE INFOTECH 5,731.5 -1.7BSE MID CAP 6,251.2 -0.4Mining• Coal India Ltd (CIL), the world’s largest miner of thefuel, will use satellite technology to prevent shipmentsfrom being hijacked amid a shortage that has hit suppliesto thermal power projects across the country.• Supreme court commissioned study on iron ore miningin Karnataka’s Bellary district has suggested productionof the steel making raw material should be cut byas much as 40% to prevent environmental degradation.FertilizerBSE SMALL CAP 6,932.0 -0.4BSE TECK INDEX 3,489.8 -0.9METAL INDEX 11,650.0 -4.0OIL & GAS INDEX 9,054.7 -1.4Source: BSE• The Department of Fertilizer has objected to givingdirect cash subsidy to retailers even in the interim period,saying that it will not serve the purpose of a newmechanism.Oil and Gas• The oil marketing companies announced petrol price hikeby Rs 1.8 per litre. This is the third hike in less than sixmonths. The exact price hike for users would vary asdifferent State Governments levy different levels of localtaxes on petrol.CNX CNX SegmentIndicesClosing ValueClosing Value onon 4 November21 October 20112011Week's %ChangeAuto• Attempting to internationalize its automotive brand aggressivelyoutside the crisis ridden Euro-zone, leadingFrench carmaker PSA Peugeot Citreon announced it willintroduce its products in the New Delhi Auto Expo 2012and roll out new cars from the upcoming Sanand plant in2014.CNX CNX NIFTY Junior 10,178.7 9,682.7 1.8 -2.1CNX CNX MIDCAP 7,320.0 7,008.1 1.1 -1.8BANK BANK NIFTY 9,836.4 9,695.4 -0.80.4CNX CNX IT IT 6,200.2 5,948.5 -1.2 -2.8CNX CNX Realty 262.5 240.2 0.1 -2.8CNX CNX Infrastructure 2,698.6 2,554.3 0.3 -3.5Source: NSE NSE- 4 -

5GLOBAL NEWSUSA• In the week ending 29 October, the advance figurefor seasonally adjusted initial claims was 397,000, adecrease of 9,000 from the previous week’s revisedfigure of 406,000.• US Non-farm payroll employment continued totrend up in October (+80,000), and theunemployment rate was little changed at 9.0%.Employment in the private sector rose, with modestjob growth continuing in professional and businessservices, leisure and hospitality, health care andmining. Government employment continued totrend downwards.EuropeAsiapresident announced for a referendum on thesame. However, the referendum did not take place,instead the Greek PM faced a vote of confidence onSaturday , which he survived despite greatspeculation. Thus, avoiding snap elections thatwould have torpedoed Greece’s debt bailout dealand inflamed the euro zone’s economic crisis.• Indonesia’s economy grew by 6.5% in the threemonths through September from a year earlier.Indonesian economy has grown over 6% for thefourth consecutive quarter as consumption andinvestment countered the impact of a falteringglobal economy.• Post the Euro Zone’s leaders decision on a packageto deal with the sovereign debt crisis, GreekDisclaimerThe data used here are from various published and electronically available primary and secondary sources.Despite due diligence, the source data may contain occasional errors. In such instances, CII is not responsiblefor such errors.CII Economy Update is a weekly report prepared by the CII Economic Research Group.Reach us at: ecopolicy@cii.in249-F, Sector 18, Udyog Vihar, Phase IV, Gurgaon - 122 015, Haryana, INDIATel: +91-124-401 4060-67 • Fax: +91-124-401 4080 • Email: • Website: www.cii.in5

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